Bid for UAL Seen Passing U.S. Scrutiny

Although the Government has indicated that it is prepared to take a harder line against leveraged buyouts of airlines, it is unlikely to reject outright a $6.75 billion bid for the UAL Corporation, the parent of United Airlines, analysts said over the weekend.

The bid, for $300 a share, was presented to UAL's board on Friday after the stock market closed. Marvin Davis, who offered $275 a share for UAL, said in a letter to the board that he might top the bid made by a group led by the pilots' union and UAL's chairman, Stephen M. Wolf. UAL's stock rose $7.25 a share on Friday, closing at $287.

After Mr. Davis, a Beverly Hills, Calif., billionaire, made his initial bid of $240 a share on Aug. 7, a senior Transportation Department official said, ''We would look at Mr. Davis or any other bidder very carefully.''

The Transportation Department has become especially concerned about leveraged buyouts since a group led by Alfred Checchi, the Los Angeles financier, acquired NWA Inc., the parent of Northwest Airlines, for $3.6 billion earlier this year. The deal involved considerable debt.

Although airlines have reported record profits lately, the industry is still one of the most cyclical and is easily buffeted by changing economic trends. The Government is concerned that during a recession, a heavily leveraged airline might be forced to sell off assets, like airplanes or routes, or that it might be tempted to skimp on maintenance.

''The trend is very disturbing,'' Senator Wendell H. Ford, the chairman of the Senate Aviation Subcommittee, said at hearings earlier this year. ''Given the tenuous nature of discretionary travel, an airline laden with debt will likely face a very bumpy ride.''

Mr. Ford, a Kentucky Democrat, has ordered a study by the General Accounting Office, the investigative arm of Congress.

Samuel K. Skinner, the Transportation Secretary, is expected to devise a policy on leveraged buyouts by next month.

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Among the items that the Government will be considering in its ''fitness review'' of a UAL deal are how the buyout would affect the airline's safety standards and its ability to buy new airplanes; whether it will be forced to sell critical routes or equipment, and how well the restructured airline could weather an economic downturn and a resulting drop in passengers.

Under its broad mandate, the Transportation Department can revoke United's operating certificate, should it deem it financially unfit. But such a drastic move, which would ground the airline, is unlikely, the analysts said, since it would put thousands of employees out of work and would conflict with the Government's other mandate - to enhance airline competition. More Likely Approach

''They'd be hard pressed to do that,'' said Ed Greenslet, an analyst with ESG Aviation Services, a consulting firm based in Jacksonville, Fla. ''That's tantamount to putting the company out of business.''

It is more likely that the Government would ask the winning bidder to meet certain financial criteria. ''They can use their power to force the owners to meet a more stringent standard of equity or to beef up the board of directors,'' Mr. Greenslet said.

The analysts said the Transportation Department might be more likely to look favorably upon the labor-management bid than the one from Mr. Davis. Mr. Wolf, United's chairman, is a respected manager who, before joining the carrier in late 1987, gained a reputation as a turnaround artist at Tiger International Inc. and Republic Airlines.

Another concern the department might have about the latest bid is its provision for British Airways P.L.C.'s to have a 15 percent stake in UAL. Under United States law, foreign airlines are limited to owning 25 percent of American carriers and are prohibited from having a controlling interest. But the department's officials, concerned about the growing trend of foreign ownership, have said that they may review the policy.

Lately, airlines have been forming global links that cross national borders. The Scandinavian Airlines System, based in Stockholm, owns just under 10 percent of the Texas Air Corporation. And in the recent NWA buyout, KLM Royal Dutch Airlines of the Netherlands, acquired nearly 20 percent of the American carrier.

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A version of this article appears in print on September 4, 1989, on Page 1001033 of the National edition with the headline: Bid for UAL Seen Passing U.S. Scrutiny. Order Reprints|Today's Paper|Subscribe